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Harvard Business School Case Study


R E V : J U L Y 1 3 , 2 0 2 1


HBS Professors Marco Iansiti and Karim R. Lakhani,ost-Doctoral Fellow Hannah Mayer  P(University of St. Gallen), and Director Kerry Herman (Case Research & Writing Group) prepared this case. It was reviewed and approved before publication by a company designated. Funding for the development of this case was provided by Harvard Business School and not by the company. Professor Lakhani has been a paid key opinion leader for the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2020, 2021 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545- 7685, write Harvard Business School Publishing, Boston, MA 02163, or go to This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.


K A R I M R . L A K H A N I



Moderna (A)

We’re a technology company that happens to do biology.

— Stéphane Bancel, CEO, Moderna

Noubar Afeyan, CEO of Flagship Pioneering (Flagship) and Moderna co-founder and chairman, and Moderna CEO Stéphane Bancel (MBA 2000), took a quick break between interviews with CNN and CNBC. It was late July 2020, and Moderna had just announced that their vaccine candidate for the novel coronavirus (COVID-19) had entered Phase 3 clinical trials in the U.S., signaling that the much- anticipated drug was only one step away from commercialization.1

Based in Cambridge, Massachusetts, Moderna was a biotechnology (biotech) company with an innovative platform approach to mRNA science. The last few months had seen an unprecedented acceleration of biological work around COVID-19 at Moderna. Bancel had read about the new infectious agent in early January that was causing a pneumonia like disease in early January, and emailed National Institute of Allergy and Infectious Diseases (NIAID) Director Dr. Anthony Fauci’s team at the National Institutes of Health (NIH). Bancel said, “The day after, we learned it was not the flu, not bacteria. A day later, we learned it was a coronavirus, but not SARS or MERS.”a Early in the second week of January, Chinese scientists in Wuhan announced they had isolated and fully sequenced the virus, setting off calls for full release of the details. On January 11, the gene sequencing data was posted on

Two days later, January 13, using the genetic sequence posted online, the Moderna team finalized the design of a corona vaccine candidate against this new virus. By February 7, Moderna’s engineers made a Phase 1 clinical study vaccine, and on February 24, after passing quality control testing, they shipped it to the NIH in preparation for preliminary tests (Phase 1 clinical study) in volunteers in

a SARS = Severe Acute Respiratory Syndrome; MERS = Middle East Respiratory Syndrome.

b was a hub for prepublication data designed to assist with public health activities and research.

For the exclusive use of L. Gao, 2022.

This document is authorized for use only by Liwen Gao in AD715 Spring 2022 taught by VLADIMIR ZLATEV, Boston University from Jan 2022 to Jul 2022.



621-032 Moderna (A)


Seattle, Washington. Bancel said, “We did all this in two months. The fastest time anyone had done this before was 20 months, with SARS. It was a 90% reduction in time.”

In some respects, Moderna’s response to the crisis of the pandemic had been business as usual. After all, the company was organized to respond to health challenges like COVID-19. Founded in 2010 and designed from the ground up as a digital biotech company with a factory for in-house manufacturing capabilities, Moderna looked different from most biotechs. Yet despite $5.1 billion raised in funding, (of which $750 million came from several key strategic partners) and its innovative approach, Moderna had yet to bring a drug or vaccine to market.

In February, when the reality of the pandemic hit, Moderna pursued its COVID vaccine development within its existing organizational structure, and ran in parallel to its other drug development activities. All of its plans and investments over the past ten years—including a manufacturing facility opened in Norwood, Massachusetts, in July 2018—had situated the firm in a sweet spot to carry out rapid research, drug development, clinical trials and manufacturing.

Now, after a long day of virtual interviews with some of the nation’s biggest news outlets, Afeyan and Bancel considered the next frontier for Moderna. As the vaccine headed into Phase 3 trials, and they looked to the reality of possibly distributing a vaccine to billions around the world, they considered the impact their efforts had on Moderna as an organization. Moderna’s digital environment meant they continuously learned from every step on the production chain. But making enough vaccine for billions could transform the organization dramatically. The unprecedented scale of the challenge could swamp the organization and overshadow Moderna’s other pipeline candidates. Further, was there risk in becoming branded a COVID company? Bancel noted, “We have seven vaccines in development, all of which could provide important medicines, as no vaccines exist against any of these viruses.” He added, “How do we position ourselves outside of this? Should we do something orthogonal? What about our other vaccines?” Should Moderna set up a separate organization dedicated to COVID-19 vaccine development?

Traditional Vaccines and Drugs Vaccines of all types aimed to expose the body to an antigen that might not cause the disease but

could lead to an immune response to block or kill the virus once a person was infected. But the exact approaches to achieving this effect varied. Traditional pharmaceutical (pharma) companies typically worked on virus vaccines, injecting a weakened or inactivated form of the virus into the human body. Viruses typically caused diseases by reproducing thousands of times once in the human body. When weakened viruses were injected in the human body, they reproduced fewer than 20 times; because of their limited ability to reproduce, the disease did not break out, yet the low level of viral replication was enough to trigger the body to generate antibodies that would protect the vaccinated individual against that same strain of viral infection in the future. Vaccines for diseases such as chickenpox, measles, and polio all followed this approach. Proven to reduce disease, disability, death and inequity worldwide,2 few medical interventions could compete with vaccines for their cumulative impact on public health and well-being of entire populations. Immunization efforts had eradicated smallpox globally, and eliminated measles, polio, and rubella from the Americas.3

An alternative to a weakened virus was to inject altogether inactivated viruses, which could not reproduce at all or cause the disease. Because the immune system still perceived that a virus had entered the body, it generated antibodies to protect against this interloper. While this type of vaccine typically required multiple doses to achieve immunity, its advantage lay in not subjecting the recipient

For the exclusive use of L. Gao, 2022.

This document is authorized for use only by Liwen Gao in AD715 Spring 2022 taught by VLADIMIR ZLATEV, Boston University from Jan 2022 to Jul 2022.



Moderna (A) 621-032


to even a mild form of the disease; it could thus be given to people with weakened immune systems. This approach had been used, among others, in Hepatitis A and rabies vaccines.4

Vaccine and Drug Development

Big pharma players, including industry leaders Johnson & Johnson, Merck, Pfizer and Roche, generally relied on traditional approaches to develop drugs, including vaccines. Traditional vaccine development typically began with research endeavors in university labs, medical science centers or smaller biotech firms, relied on years of research and were usually funded by government grants or private foundations.5 This initial period of discovery was largely dedicated to isolating a pathogen and reducing its potency or inactivating it for use in a possible vaccine. These potential vaccines would eventually make it through the research phase, be tested on small animals, such as mice or rabbits, followed by larger animals like pigs or monkeys. Such preclinical testing helped to understand how the vaccine worked and how it might affect the human body.6 (See Exhibit 1.)

During these periods of drug research with parallel pre-clinical (i.e., animal testing) efforts, multiple groups around the world could be working on similar ideas, including the development of vaccines against a virus or bacteria. Researchers conveyed progress through presentations at science conferences or peer-reviewed journal articles. Big pharma companies stayed close to such developments. Scientists working at pharma companies often came in only at this stage, attending such conferences and reading journal articles to get an overview of the most promising candidates. (See Exhibit 2 for an overview of the top pharma companies.) When convinced of the idea’s success and commercial viability, pharma representatives partnered with scientists to expand their research toward product development. This process could take up to 10 years, and many of ideas never moved past initial research.

Vaccine candidates that passed the research and pre-clinical testing stages moved into clinical trials, (i.e., tests in humans). This happened across three phases. In Phase 1, a small group of people volunteered to evaluate the safety, immune effect and tolerance across different drug dosages. In Phase 2, a larger group was used to confirm formulations and dosages. Phase 3 involved several thousand human volunteers to evaluate the protection provided by the vaccine. Such clinical trials often took multiple years, and could be conducted by third-party providers. Following successful completion of these trials, companies sought regulatory approval; in the U.S., at the national level from the Food and Drug Administration (FDA) and in the EU, at the international level. Regulators granted authorization for manufacturing new drugs or vaccines.

Once the regulators gave approval, manufacturing and shipping could commence. Many big pharma companies relied on third-party partners for these services, including licensing and contract manufacturers. They used elaborate demand-forecasting schemes to ensure that supply met demand; these often necessitated that pharma companies produce large quantities of a vaccine. This stage continued to see close cooperation between the pharma companies and regulators to ensure the accuracy of the demand forecasts. Upon introduction into the market, a new drug or vaccine continued to be monitored closely by the drug manufacturer and regulatory bodies.